Insights & Resources

Lion Drilling Affirms Potential to Increase Resource Confidence

Company Description
Power Metallic Mines Inc. is a Canadian exploration company prospecting for nickel, copper and other battery metals in Canada and Chile. It is actively advancing its Nisk property in Quebec, which is host to a high-grade Ni-Cu-Co-PGM sulphide deposit. Beyond Nisk, Power Metallic indirectly has an interest in significant land packages in British Columbia and Chile, by its 50% share ownership position in Chilean Metals Inc. It also owns 100% of Power Metallic Arabia which owns 100% interest in the Jabul Baudan exploration license in Saudi Arabia’s Jabal Sayid Belt.

Impact: Slightly Positive

Power Metallic (PNPN) reported additional assays for five in-fill holes at the Lion Zone at its 80%-owned Nisk polymetallic project in Quebec. The drilling was designed to test plunge extensions of known high-grades and to expand the deposit footprint. The success of this campaign together with the recent excellent metallurgical test results bode well for a maiden mineral resource estimate at Lion. The geologic lines of evidence continue to suggest opportunity for a world-class Ni-Cu-PGE deposit on the property. Multiple new geophysical targets have been identified south of Lion on the recently acquired Quebec Hydro claims. PNPN continues to advance their exploration effort with six drill rigs.

  • Drilling extends plunge of high-grade mineralization at Lion Zone. Highlights include: 1) 4.11% CuEq (0.68 g/t Au, 9.04 g/t Ag, 0.88% Cu, 5.01 g/t Pd, 1.29 g/t Pt, 0.06% Ni) over 20.4m from 495.8m downhole (PML25-046), and 2) 6.84% CuEq (2.1 g/t Au, 32.86 g/t Ag, 3.3% Cu, 0.96 g/t Pd, 0.01 g/t Pt, 0.43% Ni) over 8.6m from 368.4m downhole (PML-25-045).
  • Grade and size continue to grow. Extensions on the west side of Lion included 2.69% CuEq over 7.66m (PML-25-34a). Furthermore, hole -036, which was drilled ~150m west of the main Lion zone, returned 0.95% CuEq over 7.2m incl. 2.36% CuEq over 2.4m. We note that these results may indicate the start of another lens of polymetallic mineralization west of Lion.
  • Considerable ground to explore. The inaugural NI 43-101 MRE (2023) at Nisk previously outlined indicated and inferred (I+I) resources of 7.2Mt at 1.12% NiEq for 80.8kt (178M lb NiEq) (read note). The Nisk deposit is located 5.5km southwest of Lion along strike within an ultramafic host. The geologic model suggests the host rocks form a complex basin providing a possible repeat of the mineralized horizon to the south.
  • Our back of the envelope Lion Zone MRE. Assuming dimensions of ~700m down plunge, by ~300m along strike by and average true width of ~10.9m, and applying an SG of 3.2 g/m3 , results in a resource tonnage of ~7.5Mt. When we apply the average of 77 intercepts reported at Lion of 4.5% CuEq, we estimate a potential resource of ~725M to 750M lbs of contained CuEq. We consider the existing Lion and Nisk deposits to effectively underpin the value of PNPN at the moment.
  • NYSE listing pending. Power Metallic expects its application to list on the big board to be approved within the quarter. In addition, 51.47% owned Chilean Metals (TSXV:CMCG, Not Rated) is expected to begin trading on by the end of February.

We maintain our BUY rating and target price of C$2.50/sh. Our valuation is based on a probability-weighted assessment of the in-situ resource potential on the Nisk property ranging from a low end of 1.0B lbs CuEq to a maximum of 6.7B lbs CuEq together with the current cash and other project interests. Upcoming catalysts: 1) Updates from the current 100,000m drill program, 2) Mineralogical and preliminary metallurgical testing of the Lion Zone, and 3) Updates from other PNPN projects.

Figure 1:
Lion zone intersections reported in this news release

Source: Company Reports

Figure 2: Lion Drill holes reported in this news release, with off-hole BHEM anomalies from recent drilling

Source: Company Reports

Figure 3: Exploration targets being explored on the Nisk project

Source: Company Reports

Figure 4: A brief overview of historical drilling stats at the Lion zone

Source: RCS Estimates

Figure 5: Probability weighted valuation estimate for Nisk

Source: RCS Estimates

Ron Stewart | MD, Mining Analyst
Daniel Kozielewicz | Research Associate
Shikhar Sarpal | Research Associate
Alex Riazanov, CFA | Research Associate

Red Cloud Securities Inc.
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Updated February 20, 2026

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